Paul J. Evanson was named president of Florida Power & Light Co. to succeed Stephen E. Frank, who resigned in January. Frank led the company through a tough restructuring process. Evanson, 53...
Gas Price Volatility: Of Winters Past and Futures Market
of gas supply under collars or fixed-price contracts. Case No. 37394-GCA54, 177 PUR4th 587, May 28, 1997 (Ind.U.R.C.).
IOWA. Utilities board allows MidAmerican Energy Co. to offer optional fixed-price sales service in a two-year pilot if the utility will absorb any gains and losses. Docket No. RPU-97-C (TF-97-201), 181 PUR4th 395, Dec. 10, 1997 (Iowa U.B.).
MICHIGAN. Regulators allow Michigan Consolidated Gas Co. to increase reliance on fixed-price gas supplies, but reject proposal to include a "volatility adjustment" in the gas cost recovery factor. Case No. U-11145, 179 PUR4th 333, Aug. 13, 1997 (Mich.P.S.C.).
NEW JERSEY. Stipulation says that, assuming normal weather, Public Service Electric & Gas Co. will acquire up to 50 percent of residential gas supply through fixed-price contracts or financial derivatives to hedge or lock in price, such as floors, swaps, caps, collars, puts and calls. Board acknowledges that customers could miss out on some price savings. Docket No. GR96070554, 179 PUR4th 326, July 30, 1997 (N.J.B.P.U.).
NEW MEXICO. PUC fines Public Service Co. of New Mexico for understating gas supply costs. Finds that near-total reliance on spot market purchases led to a price spike in retail gas rates. Case No. 2752, 175 PUR4th 393 (N.M.P.U.C.).
NEW YORK. Rule requires gas utilities to review procurement practices and submit plans for fixed-price service, but allows LDCs to limit fixed prices to 10 percent of customers and to exclude non-core and low-volume (cooking only) customers, who would not likely benefit. Case 97-G-0600, 180 PUR4th 553, Oct. 7, 1997 (N.Y.P.S.C.).
VIRGINIA. Pilot program allows Roanoke Gas Co. to use financial instruments to hedge against prices for up to 25 percent of normal wintertime gas demand, excluding demand supplied from storage withdrawals. Case No. PUE970420, July 24, 1997, 179 PUR4th 364 (Va.S.C.C.).
NYMEX to the Rescue?
New Contracts Could Hedge Against Gas
• Cinergy Control Area (NYMEX). 736 MWh, Peak hours (delivery 7A.M. to 11P.M., Eastern time).
• Entergy Control Area (NYMEX). 736 MWh, peak hours (delivery 6 A.M. to 10 P.M., Central time).
• PJM Interconnection (NYMEX). On hold, pending implementation in April 1998 of locational marginal pricing for transmission and development of experience in cash market.
• Twin Cities (Minneapolis Grain Exchange). 736 MWh, peak hours (delivery 6 A.M. to 10 P.M., Central time); 368 MWh, off-peak hours (delivery 10 P.M., to 6 A.M., Central time).
1 John Herbert, James Thompson, and James Todaro, "Recent Trends in Natural Gas Spot Prices," Natural Gas Monthly, December 1997, p. vii (U.S.E.I.A.).
2 Natural Gas Weekly Market Update, Feb. 9, 1998 (U.S.E.I.A.).
3 Benjamin Schlesinger, "Natural Gas Industry Trends: Commoditizing Everything in Sight," posted by New York Mercantile Exchange, see www.nymex.com/ein/ein.html.
4 LDC System Operations and Supply Portfolio Management During the 1996-97 Winter Heating Season, A.G.A. Issue Brief 1997-06, June 10, 1997.
5 William Trapmann and James Todaro, "Natural Gas Residential Pricing Developments During the 1996-97 Winter," Natural Gas Monthly, Aug. 1997, p. l (U.S.E.I.A.).
7 Herbert, et al., see note 1.
8 63 Fed.Reg. 7406, Feb. 13, 1998.
9 63 Fed. Reg. 3543, Jan. 23, 1998.